Industry Odisha Bureau, Oct 22: The Centre is studying tax concessions and flexible compliance to help shipowners adopt methanol. Uniform port pricing is also under review, while work on re-fuelling infrastructure has begun.
India may make methanol the primary fuel for ships in its green maritime shift. The Centre is weighing tax concessions and more flexible compliance to speed the switch. The proposals remain under consideration and have not been approved.
“Multiple suggestions are being examined,” said an official who declined to be named. Under the plan, methanol would be the first step towards alternative marine fuels. Fiscal support could narrow the cost gap that often deters shipowners from alternative fuels.
The Ministry of Ports, Shipping and Waterways began a study on methanol use. It did so jointly with the Directorate General of Shipping, the maritime regulator. The study seeks uniform port charges for ships planning to refuel with methanol in India. It also seeks quicker turnaround times for such vessels.
Officials are also considering uniform methanol prices across Indian ports. Such a mechanism is still only a proposal. Consistent pricing would let shipping lines plan fuel costs across voyages with more certainty. Operators could then compare ports on service rather than on unpredictable fuel bills.
Faster turnaround matters because every extra hour in port adds to operating costs. The government is examining infrastructure to help methanol-fuelled vessels clear ports faster. This includes production plants, port storage tanks and bunkering facilities. Bunkering refers to the supply of fuel to ships.
Another proposal would ease regulations to speed approvals for setting up these facilities. Lengthy clearances can delay fuel projects and raise costs for developers. Simpler rules could help port authorities and fuel suppliers build capacity sooner.
Energy security forms another part of the case for methanol. India continues to rely on imported fossil fuels. Methanol, by contrast, can be produced at home from sources such as agricultural residue.
Not all methanol carries the same environmental benefit, however. Most methanol today is made from natural gas or coal. Such fossil-derived fuel offers limited climate gains over conventional marine fuels. Bio-methanol from biomass can cut lifecycle emissions, depending on how it is produced.
Domestic output could diversify the fuel sources available to Indian ports. Its scale will depend on production costs and commercial viability. Reliable feedstock collection would also be needed to keep plants running.
A second official said predictable calls by global container lines could anchor methanol demand. Container lines run fixed schedules, making their fuel needs easier to forecast. Such visibility, the official added, could give suppliers confidence to invest. That spending would cover methanol production, storage and bunkering.
The reasoning is largely commercial. Fuel suppliers rarely build costly plants without assured buyers. Shipping lines, in turn, hesitate to order methanol-capable vessels without reliable refuelling points. Steady port calls could help break this cycle.
The second official said efforts to improve local supply of alternative fuels are under way. Work has also begun on infrastructure for methanol-based shipping. For now, tax concessions and pricing reforms remain proposals awaiting a decision.
